Correlation Between Kotak Mahindra and Tamilnad Mercantile
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By analyzing existing cross correlation between Kotak Mahindra Bank and Tamilnad Mercantile Bank, you can compare the effects of market volatilities on Kotak Mahindra and Tamilnad Mercantile and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Kotak Mahindra with a short position of Tamilnad Mercantile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kotak Mahindra and Tamilnad Mercantile.
Diversification Opportunities for Kotak Mahindra and Tamilnad Mercantile
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kotak and Tamilnad is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Kotak Mahindra Bank and Tamilnad Mercantile Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tamilnad Mercantile Bank and Kotak Mahindra is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Kotak Mahindra Bank are associated (or correlated) with Tamilnad Mercantile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tamilnad Mercantile Bank has no effect on the direction of Kotak Mahindra i.e., Kotak Mahindra and Tamilnad Mercantile go up and down completely randomly.
Pair Corralation between Kotak Mahindra and Tamilnad Mercantile
Assuming the 90 days trading horizon Kotak Mahindra Bank is expected to generate 1.12 times more return on investment than Tamilnad Mercantile. However, Kotak Mahindra is 1.12 times more volatile than Tamilnad Mercantile Bank. It trades about 0.05 of its potential returns per unit of risk. Tamilnad Mercantile Bank is currently generating about -0.05 per unit of risk. If you would invest 178,390 in Kotak Mahindra Bank on November 2, 2024 and sell it today you would earn a total of 11,760 from holding Kotak Mahindra Bank or generate 6.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.04% |
| Values | Daily Returns |
Kotak Mahindra Bank vs. Tamilnad Mercantile Bank
Performance |
| Timeline |
| Kotak Mahindra Bank |
| Tamilnad Mercantile Bank |
Kotak Mahindra and Tamilnad Mercantile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kotak Mahindra and Tamilnad Mercantile
The main advantage of trading using opposite Kotak Mahindra and Tamilnad Mercantile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kotak Mahindra position performs unexpectedly, Tamilnad Mercantile can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Tamilnad Mercantile will offset losses from the drop in Tamilnad Mercantile's long position.| Kotak Mahindra vs. Touchwood Entertainment Limited | Kotak Mahindra vs. Radaan Mediaworks India | Kotak Mahindra vs. Ankit Metal Power | Kotak Mahindra vs. NRB Industrial Bearings |
| Tamilnad Mercantile vs. Sapphire Foods India | Tamilnad Mercantile vs. Patanjali Foods Limited | Tamilnad Mercantile vs. IOL Chemicals and | Tamilnad Mercantile vs. JGCHEMICALS LIMITED |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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